Bull Market For Metals Prices Skyrocketing

Aug 16, 2006

Chart provided by Sherwood of Mechanicsburg, Pa., a division of Harsco GasServ

Tight production capacities, rising costs for raw materials, natural gas, and electricity and with increased costs for fuels and logistics are pushing metal producers to increase the base prices for metals and to add surcharges related to their cost factors over the first half of this year.

For example, the price of brass has increased to near $3.00 per pound. Brass was $2.00 per pound in February, and was less than $1.00 per pound in May 2004.

Besides the price of brass surging, stainless steel producers have announced repeated price increases. Prices for carbon steel products softened slightly in June and May, but are expected to continue to rise through the end of this year. Industry analysts say they expect prices for steel to increase 9 percent in 2007.

Typical of prices for metals was the June 5 announcement from Universal Stainless & Alloy Products, Inc. (www.univstainless.com) that it would increase the base prices for its premium-melted steels by 6 percent. Besides Universal Stainless, Allegheny Ludlum Corp. and AK Steel recently announced they would increase their prices for stainless steels.

Universal Stainless & Alloy said it was adding copper to its raw material surcharge formula effective on all shipments scheduled after July 1, 2006. Prices for copper have been famously volatile this year, and prices for nickel, manganese and cobalt, all materials that comprise stainless steel, also have become volatile and pricey.